The Takeaway: Student Loan Debt Still Haunts Older Adults

Young Adults Aren’t the Only Ones Burdened by Student Loans: These days, it often seems the younger generations (of which I am a member) think they invented student loan debt. But millions of older adults are still paying off student loan debt. New research from the Federal Reserve Bank of New York found Americans 60 and older still owe about $36 billion in student loans.

Some of these loans were taken out by boomers and seniors entering college as young adults. Some were taken out for continuing education later in life. Some were co-signs, on student loans for children or grandchildren. And more than 10 percent are delinquent, according to the Washington Post. Unlike many other debts, student loans don’t go away with bankruptcy. Consumer advocates say it’s not uncommon for Social Security checks to be garnished for student loans that are decades old.

A student loan can be a debt that’s kind of like a ball and chain that you can drag to the grave,” said William E. Brewer, president of the National Association of Consumer Bankruptcy Attorneys. “You can unhook it when they lay you in the coffin.”

Sen. Richard J. Durbin (D-Ill.) recently introduced a bill that would allow private student loan debt-although not federal loans-to be discharged in bankruptcy. According to the Washington Post, Sallie Mae (one of the nation’s largest private student lenders) and many consumer groups “support all types of student loans being forgiven during bankruptcy.” Under rules initiated by President Obama last year, federal student loan borrowers can pay 10 percent of their income for 20 years and the loan is forgiven.